FAR 18.122—Advance payments.
Plain-English Summary
FAR 18.122 addresses one narrow but important exception to the normal federal rule against paying contractors before work is performed: advance payments authorized to facilitate the national defense under Public Law 85-804. The section explains that agencies may use this authority only in the context of extraordinary contractual actions under FAR subpart 50.1, and it points readers to FAR 32.405 for the payment mechanics and related requirements. It also makes clear that this authority is not limited to one procurement method; advance payments may be made after award of sealed bid contracts as well as negotiated contracts. In practice, this section matters when a contractor needs upfront funds to support performance on a defense-related action and the Government determines that advance payment is justified under the special statutory authority. Because advance payments create financial risk for the Government, the section signals that they are exceptional, not routine, and must be handled under the specific procedures and controls in the cited authorities.
Key Rules
Special authority only
Advance payments under this section are permitted only to facilitate the national defense and only when authorized under Public Law 85-804. This is an extraordinary remedy, not a standard contract financing method.
Tied to subpart 50.1
The authority must be exercised in connection with extraordinary contractual actions under FAR subpart 50.1. That means the agency must be operating within the special procedures and limits for those actions.
Applies to sealed bid and negotiated
Advance payments may be made after award of both sealed bid contracts and negotiated contracts. The section does not restrict the authority to one acquisition method.
After award timing
The text states that advance payments may be made at or after award, which means the payment can be arranged once the contract is awarded rather than only before award.
Refer to FAR 32.405
The section directs users to FAR 32.405 for the governing payment rules. In practice, the detailed terms, safeguards, and processing requirements come from that provision rather than from this short section alone.
Responsibilities
Agency
Determine whether the advance payment is justified to facilitate the national defense and whether the action qualifies under Public Law 85-804 and FAR subpart 50.1. The agency must also follow the payment procedures and controls in FAR 32.405.
Contracting Officer
Ensure the contract action is eligible for this special treatment, document the basis for using advance payments, and coordinate the award and payment action in accordance with the cited authorities.
Contractor
Request or accept advance payments only when authorized, and comply with any conditions, accounting, or performance requirements attached to the payment arrangement.
Practical Implications
This is an exception authority, so it should be used sparingly and only when the national defense justification is real and documented.
Contracting officers should not treat this as ordinary progress financing; the legal basis must be Public Law 85-804 and the implementing FAR provisions.
Because the section applies to both sealed bid and negotiated contracts, acquisition method alone does not determine eligibility.
The short text does not provide the operational details, so users must consult FAR 32.405 and subpart 50.1 before taking action.
A common pitfall is assuming advance payments are available whenever a contractor needs cash flow; this section limits them to extraordinary defense-related circumstances.
Official Regulatory Text
Agencies may authorize advance payments to facilitate the national defense for actions taken under Public Law 85-804 (see subpart 50.1 , Extraordinary Contractual Actions). These advance payments may be made at or after award of sealed bid contracts, as well as negotiated contracts. (See 32.405 .)